Story of cities #16: how the US-run Canal Zone divided Panama for a century

The creation of the trans-oceanic canal came at a heavy price for Panama with thousands of workers dying, and the US-controlled Canal Zone generating an apartheid atmosphere that sparked deep unrest

When Vasco Nuez de Balboa crossed the Panama isthmus on foot in 1513, he had little intention of becoming the first European explorer to reach the Pacific Ocean. But his trek revealed Panamas strategic location to be a treasure as great as any of the plunder brought home by other conquistadors for the Spanish crown.

After Balboas discovery, it didnt take long for Spains royal court to imagine a canal crossing through Panama. Unfortunately, given the technology of the time, building it was all but impossible. In the 1500s, when Spains King Charles I ordered officials in Panama to study the construction of a new canal there, one replied, There is not a prince in the world with the power to accomplish this.

It was nevertheless an important overland route for centuries to come and when an American consortium finally succeeded in building a railroad through Panamas dense jungle in 1855, the line proved immensely popular. Many locals, however, werent happy: a year after it opened, riots broke out between some Panamanians and the trains passengers.

There were international tensions, too. Emboldened by the expansionist beliefs of president Theodore Roosevelt, US officials amplified the rift between Panama and Colombia so that when negotiations with Columbia broke down, the US government successfully backed insurgent Panamanians, allowing them to win their independence. In return, America was given the right to build a canal across the country. The centuries-long dream of a trans-oceanic link would finally be fulfilled.

US president Theodore Roosevelt in a construction vehicle in the Canal Zone in 1906. Photograph: Underwood & Underwood/Corbis

It came at a heavy price for Panama, however. To facilitate construction of the new canal, the US required it to give up five miles of land along each side of the planned 48-mile canal route, where the US would exercise virtual sovereignty. This area would be known as the Panama Canal Zone.

The Canal Zone officially opened on 4 May 1904. After the American command took over, construction began on the canal itself, but also on homes, schools, hospitals, offices and recreational areas for the thousands of new American residents who would come to call themselves Zonians. It was an island on the isthmus, whose thorough separation from its host country instilled in its inhabitants a level of American nationalism surpassing that of their compatriots back home.

The Canal Zone was governed by a rigid social hierarchy. Social standing, as well as salaries, were managed through a combination of army hierarchy and the zones moralistic bylaws. While married couples were allowed to occupy homes, bachelors were relegated to shared housing.

These bylaws also enshrined overtly racist segregation. Residents were divided into gold roll and silver roll workers: gold roll workers were exclusively white; silver roll workers were mainly black, most of them migrants from Caribbean island nations. Caste lines are as sharply drawn as they are in India, said one zonian quoted in Suzanne P Johnsons Brief History of the Canal Zone. Every rank and shade of a man has a different salary and exactly in accordance with that salary is he housed, treated and furnished, down to the last item.

Naturally, silver roll workers bore the brunt of the risks and hazards of constructing the new canal. As mountains of dirt were hauled from the great canals path, and mammoth lock gates that would allow ships to climb the countrys mountainous terrain were lowered into place, impoverished workers from the West Indies died in their thousands. Accidents, disease and miserable work conditions all contributed to the carnage; in the end, the canals official death toll came to 5,609 workers, only 350 of whom were white.

I shall never forget the trainloads of dead men being carted away daily, as if they were just so much lumber, recalls Alfred Dottin, a West Indian canal worker quoted in David McCulloughs extensive canal history The Path Between Two Seas. It was a living hell.

Construction of the Panama Canals locks and gates a year before its opening in 1914. Photograph: HN Rudd/Corbis

For those Zonians not confined to the silver roll, life was good and once the canal finally opened in August 1914, ushering a steady flow of battleships and cargo freighters through the leafy Panamanian jungle, their lives only got better. Canal Zone residents boasted they never had to leave it for Panama City, since all the comforts of American life were available in the zone. Theatres screened the latest movies from American studios; convenience stores were stocked with the same goods Zonians were used to back home; restaurants served hamburgers and milkshakes.

Since the function of the Canal Zone was primarily to defend the canal, its population fluctuated depending on Americas military operations, peaking at around 100,000 during the Korean War. But the zone also maintained a sizeable civilian population and when it was eventually closed at the end of the 20th century, many former residents decried the decision.

As one former resident said immediately before the zone changed hands: Its sad, its bitter-sweet to see the flag coming down on this marvellous project. To this day, former Zonians maintain a tight-knit community which meets yearly in Tampa, Florida.

For Panama, however, the effects of the canal and its surrounding US-controlled zone were far less positive. From the beginning, American construction efforts were designed specifically to offer as little economic benefit to native Panamanians as possible. A working paper by researchers Noel Maurer and Carlos Yu finds that American officials worked to deliberately minimize the spillovers from the Canal, by prohibiting Panamanians from working on it, and Panamanian businesses from providing services to the Canal Zone or to the ships passing through.

Fourth of July Avenue formed the border between Panama City (bottom right) and the US-controlled Canal Zone (top left). Photograph: Ullstein Bild via Getty Images

Though the footprint of the Canal Zone spared much of Panama City cutting westward to avoid its centre the existence of the zone was a sore spot for residents of the capital. Though technically allowed inside it, their presence was heavily discouraged by Canal Zone authorities. Panamian residents couldnt cross their own country at times without having to answer to a foreign police, says Michael Donoghue, author of Borderland on the Isthmus: Race, Culture and the Struggle for the Canal Zone.

By the 1950s, tensions had reached a point where authorities agreed to build a wall along the border between Panama City and the Canal Zone. Though the wall did not fully limit access to the zone, it further stoked hostilities.

In 1964, they reached a tipping point. On 9 January, a group of angry students at Panamas Instituto Nacional marched into the Canal Zone and insisted on raising Panamas flag above Balboa High School. When students and staff rejected them, they became violent, destroying property in the zone. Authorities responded by tear-gassing the crowd.

In the violence that ensued, property was damaged on both sides of the zone, including parts of the wall. The incident left a death toll of 28 people, most of them Panamanians. A dramatic photo of the flag raising incident made the cover of Life magazine. To this day, 9 January is commemorated in Panama as Martyrs Day.

Housing in the Canal Zone where US Senator John McCain lived as a baby; the complex is now occupied by squatters. Photograph: Jonathan Torgovnik

The incident led to an international uproar, highlighting the stark divisions between Panama City and the Canal Zone. Jose Ponse, a 10th-grade Panamanian student at the time, recalled: There was an apartheid that existed in the colonial atmosphere of the zone.

After the incident, Colombias ambassador to the United States would visit the damaged wall and compare it to another brutal symbol of segregation. In Panama there exists another Berlin Wall, he said.

The incident also created a crisis within the US. Though newly elected president Lyndon Johnson reacted deftly, preserving US sovereignty over the Canal Zone for the time being, its days as an American territory were numbered. The expansionist mentality of the early 1900s had given way to the chess-board strategising of the Cold War.

American strategists accepted it would be best to abandon control of the zone as a tradeoff to discourage Latin American countries from turning to Soviet-style communism. In 1977, US President Jimmy Carter and Panamanian president Omar Torrijos signed two treaties that would phase out US control of the Canal Zone and the canal itself. Though many Panamanians were relieved by this deal, the hostilities were far from finished.

Manuel Noriega in Panama City, October 1989, after an attempted coup failed to oust him from power. Photograph: AP

By 1989, Panama City had changed considerably from the sleepy tourist town it was before the canal was built. The city became known as a centre for international banking, propped up both by international trade and booming Colombian drug cartels looking for a place to launder their money.

During the elections that year, incumbent president Manuel Noriega appeared to have been beaten by his challenger, Guillermo Endara. Noriega, a former operative on the payroll of the CIA, had since drifted from his US-friendly position after a fallout with the Reagan administration. After the election, Noriega refused to step down, claiming the US had meddled with the election results.

On 15 December 1989, hostilities boiled over after four US soldiers were wounded, one fatally, by an angry mob in Panama City. Five days later, US troops invaded Panama in an attack the White House dubbed Operation Just Cause.

The main objective of the operation was the overthrow of Noriega. An attack on the headquarters of the Panama Defence Forces spread to the impoverished El Chorrillo neighbourhood, however, causing extensive damage to civilians and their property.

A few hours after the invasion began, Noriega was deposed as president and Endara was officially sworn in. But much of the city had been left in ruins. And while official Pentagon figures held that 516 Panamanians had been killed in the conflict, human rights groups in Panama placed the death toll as high as 3,500.

It was an ugly last gasp of what had been nearly a century of American rule in Panama. I wouldnt wish such destruction on my worst enemy, said Rosa Turner, a resident of the neighbourhood, in an interview 25 years after the invasion. We dont even know where the remains of our deceased loved ones are, to leave them flowers at their tombs.

The Panama Canal, with the high-rises of Panama Citys San Francisco district in the background. Photograph: David Levene for the Guardian

Panama City has changed greatly since then. Looking at the city from the viewpoint on Isla Perica, visitors can catch a glimpse of an immense cluster of high-rises in the citys central San Francisco district to one side. The citys banking boom has continued unabated in recent years and so too have its shady deals, as revealed in the Panama Papers leaks.

On the other side, a long line of massive cargo ships waits to pass through the canal. Those ships may soon be joined by even larger ones, as an expansion of the canal set to open next month will let in ships up to three times larger than the current limit.

One day, Panamas emblematic canal may be threatened by a new waterway in Nicaragua though locals there seem as ambivalent about that project as Panamanians were about the Canal Zone, and construction has been delayed in recent months.

In Panama, meanwhile, many of the old Canal Zones structures remain. After the mass exodus of Americans following its closure, some of the lavish homes built there were snapped up by well-off Panamanians, while other structures have simply been abandoned.

Despite the inequalities of modern-day Panama City, and the upheavals that have shaken the city for much of its history, Panamanians remain proud of their identity which remains solidly attached to the canal. As one columnist recently wrote in La Estrella de Panama: The canal is a natural resource that belongs to all of us, and thus it requires the genuine, responsible and patriotic involvement of all of us.

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